July 23, 2003	Wednesday	Jumadi-ul-Awwal 22, 1424

KARACHI, July 22: Stocks on Tuesday fell across-the-board on active profit-selling on the blue chip counters and briefly halted the market’s six-week sustained run-up, but only extreme gains were clipped at the highly inflated levels. The KSE index shed 27.69 points at 3,739.01.

It was a long overdue technical correction after bulls allowed a temporary breathing space to the bears, the presence of strong support at dips reflects that the market could resume its upward drive after the settlement of badla business.

All the leading shares suffered pruning under the lead of energy sector but insurance, sugar and some of the blue chips on other counter performed well, limiting the market decline to a modest proportion.

The opening was higher aided by reports that the Indian prime minister has accepted invitation to attend Saarc meeting in Islamabad in January as the KSE 100-share index gained another 20 points to quote at the highest of the day at 3,786. Market capitalization also fell by Rs5.575bn at Rs834.023bn.

But the mid-session witnessed a lot of selling from the carryover market, which progressively engulfed the entire blue chip sector, and finally pushed it down to 3,739.01, above the day’s lowest, down 27.69 points.

“Technically speaking, the market needs a massive correction as its highly overbought position points to a lurking danger,” most analysts believe. “It is better for it to respond independently to its technical demands.”

The late selling appears to be a spill-over of active offloading on the forward counter where the situation appears to be a bit jittery owing to uncertainty over the proposed talks between the opposition and the government on the LFO possibly by the end of the current week.

Some leading brokers predict leading bulls are inclined to take profits at the current highs to push prices of blue chips to certain pre-determined lower levels and then to make short-covering.

“Interim working results, including dividend announcements by some of the leading companies such as Hub-Power are due early next month and bulls are making advance planning to hold the fort,” they said.

Leading analysts claim the market could witness a modest reversal if the opposition-government parleys on the LFO fails but don’t entertain bearish ideas at least for the near-term.

“The market direction may be unpredictable beyond the index of 4,000, and until then bears may not have the guts to tilt the balance in their favour even after indulging in panic selling,” they said.

Wyeth Pakistan and IGI Insurance, which rose by Rs10 to Rs12.75 were leading among the gainers, followed by Aventis Pharma, Cherat Papers, Clariant Pakistan, Atlas Battery, Pakistan Resource Co, Dewan Khalid Textiles and Island Textiles, which posted gains ranging from Rs3 to Rs6.45.

Javed Omer and National Refinery were notable among the losers, off Rs5.40 and Rs17.75, respectively. Other notable losers were Jahangir Siddiqui & Co, National Refinery, Pakistan Oilfields, Pakistan Refinery, Crescent Steel, Millat Tractors, Glaxo-Wellcome, Reckit and Benckiser, Gillette Pakistan and Pakistan Services, off Rs3 to Rs5.40.

Trading volume fell to 386m shares from the previous 478m shares as gainers forced a strong lead over the losers at 255 to 173, with 41 holding on to the last levels, out of the 469 actives.

Dewan Salman topped the list of most actives on reports of higher interim earnings but was traded unchanged at Rs21.30 on 35m shares followed by PIAC, up 35 paisa at Rs16.70 on 30m shares, FFC-Jordan Fertilizer, easy five paisa at Rs16.30 on 28m shares, Hub-Power, lower 25 paisa at Rs39.20 on 27m shares, D.G. Khan Cement, off 30 paisa at Rs37.10 on 24m shares, and PTCL, also off 30 paisa at Rs31.25 on 21m shares.

Other actives were led by Maple Leaf Cement, easy 30 paisa on 20m shares, T.R.G. Pakistan, lower five paisa on 16m shares, Bosicor Pakistan, firm by five paisa on 15m shares and Pakistan PTA, easy five paisa also on 14m shares.

FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their counterparts in the ready section barring FFC-Jordan Fertilizer, which rose by 15 paisa at Rs16.50 on 5m shares.

PSO was leading among the losers, off Rs2.44 at Rs248.51 on 5m shares, its August settlement fell by Rs2.82. PTCL was off 21 paisa at Rs31.34 on 6m shares, while Hub-Power fell 20 paisa at Rs39.30 on 5m shares. Dewan Salman, ended lower five paisa at 21.40 on 3m shares. ICI Pakistan, was an exception, which rose by Rs2.35 and Rs2.60 at Rs59.75 and Rs60.60 for both the settlements.

DEFAULTER COMPANIES: A record number of shares came in for trading beating previous single-session highest figure of 57 at 67, with Unity Modaraba being in the lead, easy five paisa at Rs2.05 on 0.784m shares.

Other actives were led by Biafo Industries, lower 15 paisa at Rs5.55 on 0.175m shares and Mukhtar Textiles, higher 65 paisa at Rs3.15 on 0.163m shares.